All Forum Posts by: Michael Dunn

Thank you all for all of the Great responses and Recommendations.... i really appreciate it 

Amy E. , what exactly please do you mean by TSP ?

Thanks 

Hi Rod,

Thanks so much for your reply 

Debt wise, I only have 2 Credit Cards .... Totaling right around $5,000

Other than my Credit Card Payments , I have my Current house note, which is $480 a month 

So the Delimma that I am running into, is that ..... I DON'T see my Income going up anytime soon, so I won't be able to Show on my Taxes an increase in Income anytime soon , to show that I am Making more $ , and can Pay another House Payment 

The Thing is, is that there is a Tenant in the Mother-In Law wing part of my House, that has a Tenant in there who has been living there and Paying Rent for over 2 years now.  I have only owned the Property for 7 months. 

Both Lenders told me, that I CAN'T use the Rent $ that he's been paying as Income that I have been Receiving , since I haven't been claiming it on my Taxes for 2 years.

So i have a MAX of $40,000 in Equity that I can get out of my Primary, although I don't want to Borrow the Full amount . I'll Likely go with a HELOC , as I won't know exactly how much of the $ I'll need right off the bat

I may be able to Purchase a Distressed Property for around $25,000 and Put about $10,000 into it in Materials ( and most of the Labor would be FREE... I.E. me doing most of it ) 

If I can get this Property for this Price with the Money from the Refi/HELOC , this would be a Fantastic Deal/Cash Flow Rental ( Actual 2 rentals .... connected by a Breeze-Way roof

Thoughts please ??

So I have been running the numbers for various possibilities on how best to use the Equity I am looking to use on my Primary, for the Use of Investing it .

I'll give a " Quick " Breakdown on where I am currently at .... Financial wise, as well as what my options are 

CURRENT SITUATION:

I have $40,000 of Equity in my Primary

I can use my VA loan to get the full $40,000 out of the Equity if I want to ... Although i don't really want to MAX out all of my Equity

I got Denied a Loan to Purchase an Investment property through Two seperate Portfolio Lenders in my area ( Due to my DTI ratio being near the MAX ..... I could only Qualify for a $180 Note roughly , which would put me at the 45% mark on the DTI..... This would allow me for a Loan through either of the Portfolio Lenders of around $25,000 ...... Can't get much of a Property in my area that's in a decent area for that price .

Also, if I refi. my current Primary into a VA Loan ( currently it's financed via FHA loan ), this will tie up my Primary for another Year, whereas I have been living in my primary for 7 months now ...... I was wanting to use my VA loan to purchase another Primary at the First of next year . But if I refi. using that VA Loan , I'll basically be starting from scratch and will lose that 7 months that I've been living in my Primary and will have 1 year before I could use my VA loan, vs just a 5 month wait if I don't refi. using VA loan.

Buttt, I can ONLY get upwards of 100% on the Refi, if I use the VA loan vs just 80% if I get the refi,. using Conventional

Soooo, I have been weighing my Options ....And an 80% refi.  would give me $20,000 in Cash to use to Invest with , where as 100% refi. would give me $40,000 to Invest with ..... Definitely a Big difference 

It's hard to do much with jt $20,000 in Cash to Invest in Real Estate with ..... Especially when you can't Take out a Loan to purchase a Property 

Now with $40,000 ...... I might could find a $30,000 property and put about $8,000 into it + closing Costs that has an ARV of $60,000 ...... So $20,000 of Equity in it

I've even considered getting 1 -2  Section 8 properties, although i know there is definitely some risk involved.

Questions please......

1. Can you ever have 2 VA loans at the same time ...... I.E. use it within say 2 -3 months apart , for the purchase of 2 properties ?

3. Should I go with a Cash-Out refi . OR do a HELOC ?

And does one of them give you a higher LTV over the other ?

2. I was told that the fact that I have a renter in the Mother-in-law wing of my property who pays rent, can NOT be factored in.... because It hasn't been 2 years that e's been a tenant via shows this on my Taxes .

If I could get the Lenders to see that he has been there for longer than 2 years ( he's the same tenant that was there with the previous owner, before I bought the property ) ..... This would DRASTICALLY drop my DTI down to around 20% ( as the amount he pays in Rent , pays all of my House Note .... PITI )

Thank you to the Community here for all of everyone's help and Advice.

I have this Equity that I can use, and just need some help in figuring out how best to use it ,and what LTV to go with ( 80% giving me $20,000 or 100% giving me $40,000 .... but tying up my VA loan for a year

Thank you all for your help and replies..... A lot of useful information and things I know know, that I was previously unaare of, regarding Section 8 

Thank you for your reply Nicholas

I am now considering getting into the Section 8 parallel of Buying a few Lower priced Properties and placing them into the Section 8 Program.

I have been reading and researching Section 8 housing , and the Pros/Cons that go along with it 

Can Members on here who Have and or currently rent Under the Section 8 provisions ...... Some of their experiences and some tips to follow , to make renting under Section 8 as " Less Stressful " as possible lol

I Live in the Memphis,TN area, if knowing this helps at all. 

Thanks so much for the Help and any insight and Tips 

Kerry Baird,

Great advice.

That makes sense.... That if I refi. my current FHA loan on my Primary into a VA loan, I have now technically LOST the 7 months of elapsed time that I have been in my Primary ( 5 months left until the 1 year mark .... so if I refi. it into a VA loan, I'd be starting from scratch with 1 year to go vs 5 months. Great advice , Thank you :)

Kerry Baird

Awesome information .  Thank you everyone for your replies and contributions to this thread

Great advice, Thank you all very much for sharing 

them, is via a Phone Call ?

I have my Cover Letter and Envelopes ready to go ( with a Picture of the Property copied on the Envelope, bu I am trying to think ahead, and have a plan of action ( well mainly what to say, / How to present myself that I am Interested in purchasing their vacant looking property , etc.  )  If I end up having to Call them to find out if they want to sell. 

Can anyone shed some light please on how to approach the Owners of Vacant/ Distressed looking properties, when we are Driving For Dollars and wish to purchase the property from them ?

Thanks so much